INDIANAPOLIS, Ind. (May 5, 2015)– A new report ranks Indiana among the top ten states with the highest bankruptcy rates. The Credit.com report ranks the Hoosier state sixth in the nation, with a 4.36 per 1,000 bankruptcy rate. Tennessee came in at number one and Illinois ranked four.
Allstate agent Roy Lederman said it could an after effect of the economy.
“A lot of people are out of work or are finding, you know, new positions (but) now they’re not making as much as they were making, so they’re underemployed,” he explained. “By racking up credit card debt sometimes a lot of people feel like it’s a hole they can’t get out of.”
Maybe you can.
Lederman said the first step is to find the root of your problems by determining which areas you’re spending too much on. For many, they’ll find their problems in credit card spending.
According to National Debt Relief, Hoosiers have an average $4,577 in credit card debt.
If you have multiple cards with debt, Lederman said use the “snowball effect” to pay them off faster.
“Go ahead and pay those small balances off first. Celebrate that victory. Take the money that you were applying towards that credit card and then apply it to the next.”
If you have any extra cash coming in; a tax refund and bonus, then be smart about how you use it.
“I call it the third mentality,” said Lederman. “You want to take a third of those dollars and apply it towards savings, a third of those dollars and apply it to your debt and then a third discretionary.”
Once you are out of debt, start putting in money into a rainy day fund or savings account and have a new budget in place so you don’t fall into old habits.
Hoosiers have a hard time-saving, according to Wallet Hub which ranked Indiana nearly last for people with rainy day funds.